Consultation launched to cut red tape for asset managers and boost growth
Red tape will be cut for asset managers, as the Chancellor goes further and faster to drive growth through the Plan for Change.
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Consultation launched to simplify regulation for Alternative Investment Fund Managers.
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Changes are expected to save asset managers time and money, while enhancing the UK’s appeal as a premier destination for capital management.
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Continues action to cut red tape and reduce the burden of regulation on businesses, to go further and faster to drive growth and put more money into people’s pockets through Plan for Change.
Following the Prime Minister’s commitment to cut the administrative cost of regulation on business by a quarter last month, the Treasury will consult on changes to rules governing Alternative Investment Fund Managers (AIFMs).
It will be focused on removing unnecessary barriers to investment by making rules less onerous for AIFMs. This will save asset managers millions in time, money and resource – while freeing them to help the UK’s most exciting businesses scale up, grow and create jobs.
Emma Reynolds, Economic Secretary to the Treasury, said:
We want to bring security to working people by going further and faster to drive growth through our Plan for Change.
That means making Britain the number one place to do business and tearing down unnecessary barriers to investment, such as costly regulation that prevents asset management firms from growing and provide capital for businesses across the country to grow.
Simon Walls, Interim Executive Director of Markets at the FCA, said:
We want rules, better tailored to UK investment managers. These could allow them to operate more efficiently, further supporting competition, competitiveness and economic growth.
It’s part of our wider work to streamline the regulatory regime for asset managers, to support the continued competitiveness of our world-leading financial services as outlined in our new strategy.
Michael Moore, Chief Executive of the British Venture Capital Association, said:
We welcome the government’s consultation on developing a simpler and more competitive system for alternative investment fund managers (AIFMs). More effective, less burdensome regulation will make the UK private capital industry more globally competitive and help it to boost investment from the UK and international investors into growing British businesses.
This consultation is an important step in securing the UK’s status as one of the world’s leading private capital hubs. We look forward to engaging on the principles and the detail of the changes, but this provides the opportunity to create a real boost for the Government’s growth mission by developing the UK’s private capital fund ecosystem and increasing inward investment in UK SMEs.
Together with the FCA we plan to refresh outdated regulatory thresholds. The consultation will take place over the next 9 weeks, providing hedge funds, private equity firms, and investment trusts the opportunity to contribute to the development of a more streamlined regulatory environment.
Currently, firms face a suite of new regulatory burdens once they hold 100 million euros in assets, which can discourage some firms from growing and financing more investment across the country.
This inadvertent cliff edge means that smaller asset management firms immediately have to sign up to the same rules as the biggest firms once they reach this threshold, bringing about large costs.
The consultation aims to create a more graduated regime, where only the largest firms – with the value of over £5 billion are subject to the full scope of requirements, with the majority of firms subject to much less prescriptive rules, helping to reduce admin costs for those businesses.
Once the consultation has concluded, feedback from the asset management sector will be used to design draft legislation which will then be shared with asset management businesses next year.
Further information
- The consultation is open from Monday 7th April to Monday 9 June - access the consultation portal here.